Irish Life & Permanent appoints Kevin Murphy as new chief executive
THE FILLING of senior executive posts within the banks made vacant by the spate of departures continued yesterday with the appointment of internal candidate Kevin Murphy as chief executive of Irish Life & Permanent (ILP).
Mr Murphy took charge of the day-to-day running of the company alongside chairwoman Gillian Bowler following the departure of chief executive Denis Casey in February over the controversial €7.5 billion deposits into Anglo Irish Bank last September.
Head of ILP’s life and pensions business since 2005, Mr Murphy (57) has worked with Irish Life since 1972, and was appointed to the board of ILP following the merger of Irish Life and Irish Permanent in 1999. An actuary by profession, Mr Murphy was responsible for ILP’s fund management business, Irish Life Investment Managers, from 1993 to 2005.
Ms Bowler said Mr Murphy played “a critical role” in managing the company over the past five months. “Like all financial services businesses at present, we face challenges in the months and years ahead, and Kevin has the right blend of experience and skills to build on the progress we’ve already achieved and to lead us through this period.”
Ms Bowler indicated that the company would recruit new non-executive directors, and would strengthen management within ILP’s treasury and banking units.
Mr Murphy said ILP had “some considerable advantages in dealing with the current situation – the strength of our life, banking and pensions businesses, the low-risk nature of our operations and the fact that we didn’t engage in any significant development lending to speak of in recent years.”
ILP’s share price dropped 5 per cent to €3.27 in a falling market yesterday, giving the company a value of €905 million, down from a peak of €6.3 billion in 2007.
Permanent TSB’s heavy reliance on wholesale funding has left the bank vulnerable, although the strong life business has helped bolster the bank’s capital position.
Mr Murphy is the second internal candidate to be appointed chief executive of a guaranteed institution following Richie Boucher’s appointment at Bank of Ireland. He is the third new chief executive to be appointed this year to one of the guaranteed lenders. Irish Nationwide appointed former civil servant Gerry McGinn last week as its new chief executive. AIB and Anglo Irish have yet to name new chief executives.
Mr Murphy’s pay package totalled €959,000 in 2008. A spokesman for ILP said Mr Murphy’s pay as chief executive would be in line with the pay cap of €500,000 sought by Minister for Finance Brian Lenihan.
The appointment of an executive from the life business is viewed as part of the company’s strategy to refocus the group away from the banking division, Permanent TSB, which has depressed the share price of the company.
“They are looking to emphasise the value of the life insurance side as well as considering the long-term strategy,” said analyst Sebastian Orsi at Merrion Capital.
The company is creating a new holding company to separate the life and banking businesses ahead of an expected shake-up of the banking sector this year.
The restructuring could pave the way for a disposal of the bank.